All Forum Posts by: Larry Whitman

Even if $4,700 is inclusive of PITI, going with 50 to 100 bps a year worth of repair/maintenance would make me think there's at least an additional $1,000 or so of monthly drag on the $1,800. Not to speak of vacancy reserve, etc. When you use the phrase "cashflowing" for the rest of your properties do you use it in the same sense (just revenue - PITI)?

But that's not the interesting conversation anyway, because it does sound like your strategy is, in fact, highly leveraged bets on Seattle home prices. Do you have a differentiated view as to why Seattle home prices will continue to go up? Or is it just the consensus view because they've gone up a lot and will probably keep going up.

Also I'm backing into average rents of $1,400-$1,500 per room based on what you've posted about your other rentals. Is that about right?

Is Seattle unique in having some sort of dislocation where renting out individual rooms yields much higher returns than the whole home? You're usually rewarded for that extra leg work obviously but rarely is the disconnect this high between what I see on Zillow and what I'm backing into as your rental rate per room. Is this just a Seattle thing? Curious what other Seattle people think on this too?

I've been a real estate investor for a long time so I can't help but ask why you bought this place. I'm curious about your rationale and what your real estate strategy is.

Your monthly mortgage cost is $4,700 and your rental revenue is $6,500 per that CNBC article I found after I googled you. $6,500-$4,700 = $1,800.

You use that to claim you "cashflow $1,800" per month. So...you don't have real estate taxes to pay? How about maintenance? Repairs? Capex? Utilities?

Aren't you paying about $1,000 a month in real estate taxes alone? There are limits to the tax deduct-ability of interest. How about home insurance? Aren't you losing money on this house?

So then my question remains: Why did you buy this house if it's FCF negative with all that work you have to put into it? The only answer I can come up with is that you just wanted to put on as big a leveraged bet as you could on Seattle home prices as possible. Any other reason?